Which of the Following Is Not an Example of a Negative

question 60

Multiple Choice

Which of the following is not an example of a negative covenant?

• A) Borrowers may not sell accounts receivable to generate cash.
• B) The borrower is required to maintain a minimum level of net working capital.
• C) Constraints associated with fixed assets regarding the liquidation, acquisition and encumbrance.
• D) Constraints associated with consolidation, merging or combining with another firm.
• E) All of the above are examples of negative covenants.

---

Definitions:

Strong Opinions

Firmly held beliefs or judgments that are not easily swayed by opposing arguments or evidence.

Emotive Style

A communication or behavioral style that is characterized by the expression and management of emotions.

Directive Style

A leadership approach characterized by giving clear, explicit instructions and expecting compliance.

Excess Zone

A state or area where something exists in quantities or amounts greater than necessary or desired.